Analysis

Hedge Ratio

By Ryan Silk & Lawrence Polatchek · Reviewed April 2026 · Options Trading Glossary

Proportion of position risk that is hedged

What is Hedge Ratio?

Hedge Ratio The proportion of a position that is hedged, or the number of hedging instruments needed to offset the risk of a position. In options, delta serves as a natural hedge ratio — an option with 0.50 delta requires 50 shares to delta-hedge one contract. The hedge ratio changes as delta changes, requiring dynamic rebalancing.

Complete Definition

The proportion of a position that is hedged, or the number of hedging instruments needed to offset the risk of a position. In options, delta serves as a natural hedge ratio — an option with 0.50 delta requires 50 shares to delta-hedge one contract. The hedge ratio changes as delta changes, requiring dynamic rebalancing.

Related Terms

Delta Hedging Delta Delta Neutral Correlation

Written by

ApexVol Research Team

Quantitative options research

All calculations use live ORATS institutional data — the same source used by professional volatility desks.

Technical reviewer

Ryan Silk, ApexVol Founder

Reviewed for technical accuracy

10+ years trading options. Built ApexVol's pricing engine, Greeks model, and IV-rank methodology.

This guide is updated as market conditions and ORATS data change. Last revised 2026-05-12. How we research →

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